By Molly Parker
mparker@scbiznews.com
Published Dec. 1, 2008

In South Carolina, where foreign automobile companies have a huge economic footprint, politicians are rallying against a taxpayer-funded bailout of Detroit.

“It sends a bad message to any foreign company looking to locate in the United States,” said Joel Sawyer, Gov. Mark Sanford’s spokesman.

Democratic congressional leaders asked General Motors, Ford and Chrysler executives to submit a formal spending and repayment plan Tuesday. And lawmakers are expected to reconvene in Washington the week of Dec. 8 to consider the aid package.

But even before viewing the details, the bulk of South Carolina’s congressmen were either opposed to the plan or leaning against it. They issued a stinging rebuke of the U.S. auto industry even though every member of the delegation drives an American-made car, according to a Charleston Regional Business Journal survey.

It’s unfair to reward an industry that has saddled itself with a top-heavy management structure, runaway employee salaries and union monopolization, the mostly Republican delegation argued while pointing to the success in their own backyards of a ripe foreign industry.

“Locally, it would be hard for me to go back to BMW, a company that announced earlier this year that, in a $750 million investment, the volume of cars exported through the Port of Charleston is expected to increase 50% to about 150,000 vehicles a year, and tell them that I supported giving money to their competitors who made poor business decisions to begin with,” Rep. Henry Brown, a Republican who represents the Lowcountry, wrote in a recent letter to constituents.

South Carolina’s senators, both Republicans, criticized the plan.

“Detroit’s basic problem is that they created a business model that doesn’t have a snowball’s chance in hell of surviving in a global economy,” U.S. Sen. Lindsey Graham said in a statement.

Sen. Jim DeMint, in a recent Bloomberg TV interview, suggested the companies restructure in bankruptcy court to help them untangle from the pricey union contracts that have hamstrung their budgets.

Rep. Joe Wilson is “not inclined” to support the bailout and Rep. Bob Inglis is “leaning against” it, staff members for the Republican congressmen said.

Rep. Gresham Barrett, also a Republican, thinks the Big Three should “do their due diligence” when it comes to looking internally to save money before they “come to Congress looking for taxpayer money,” said Colleen Mangone, his spokeswoman. His Upstate district includes BMW’s Greer manufacturing facility.

But others warn that underestimating the economic impact of the Big Three could be detrimental to the Southeast, where suppliers depend on the foreign and domestic auto manufacturers and dealerships contribute significantly to the employment base.

“It’s all globally connected and there’s no way to untangle it,” said Bob Geolas, executive director of the Clemson University International Center for Automotive Research.

Bosch, for instance, which employs 2,100 people locally, makes powertrain components that can be found in foreign and domestic vehicles.

The Center for Automotive Research, a Michigan-based nonprofit organization that conducts research and analysis of trends in the auto industry, said that a complete collapse of Detroit’s automakers would have a negative impact on foreign-owned automakers for at least one year.

The center said it would take that long for replacements to be found for suppliers and smaller companies that would also go out of business. In three years, foreign-owned automakers in the U.S. would expand enough to support on 20% of Detroit’s output.

The state’s two lone Democratic congressmen, John Spratt and James Clyburn, were less harsh in their analysis of the bailout proposal, but even they were lukewarm in their support. John Spratt is still studying the issue and hoping for a compromise, his spokesman said.

Clyburn, the House’s majority whip, will support the plan to keep the Big Three out of bankruptcy but has called for the companies to submit a detailed spending plan, an aide said. On Monday, at a Columbia news conference, Clyburn reportedly called for the resignation of top management at the Big Three.

For more on this story, read the Dec. 8 issue of the Charleston Regional Business Journal.